By Richard Rittorno
Farmers are getting corn (CORN) planted at a record pace according to this week's USDA Crop Progress report.
(click to enlarge)The data suggests that farmers are having a quick and somewhat painless spring planting, putting them at the halfway point faster than any other planting in this half of the century in both Illinois and Indiana.
Analysts say this won't be the last fast-paced planting as long as demand continues.
The implications of such smooth and fast-paced planting are directly coupled with yield. If farmers can keep the pace up with little to no issues, it will result in less acres not being planted before the rainy season.
In past years, farmers had to wait get back in the field to complete the planting and took a late penalty from a yield standpoint. Of course much can still go wrong during the growing season - such as a drought.
The report indicates that Iowa is not on track to break a record, but should reach the halfway point prior to typical dates in the past. Although fuller spring planting will benefit farmers and global demand, it will have market implications; those acres normally planted later in the season will likely hurt the yield for the later planting post-May 20.
The offset from early to late planting could be around two bushels off the trend. I know some grain traders already brushing the dust off their 1960's futures almanac for a history lesson.
Bottom Line: Traders will be looking to see how well the growing season progresses and look to yield restriction from either issue during the start of the growing season or later in the season.